AT&S: increase in revenue and earnings

“Our most recent investments are bearing fruit, our business is going well and we have been able to consolidate our position as a technology leader with the introduction of the latest technology generation“, CEO Andreas Gerstenmayer comments on the development of the first nine months. “Now it is important to implement further efficiency improvements and to evaluate potential expansion steps as part of our technology strategy“, Gerstenmayer outlines the tasks for the coming months. Asset, financial and earnings position Revenue rose by EUR 150.8 million or 24.5% from EUR 615.1 million to EUR 765.9 million as a result of generally strong demand and additional revenue from the two plants in Chongqing. Exchange rate effects, especially caused by a weaker USD, had a negative impact of EUR 23.9 million on revenue. EBITDA was up EUR 88.2 million or 86.3% and amounted to EUR 190.3 million. The increase was based on a generally strong operating performance (utilisation, yield, efficiency) and the successful introduction and rapid optimisation of the new technology generation, where AT&S holds a leading market position. This development was supported by a very positive product mix, especially in the third quarter, and a favourable currency development for production costs based on a weaker development of the Chinese renminbi against the euro. Earnings were negatively impacted by continued high raw material prices and the persisting price pressure on IC substrates. The EBITDA margin amounted to 24.8%, up 8.2 percentage points on the prior-year level of 16.6%. Compared with the prior-year period, depreciation and amortisation increased by 12.4% to EUR 101.5 million, which was primarily attributable to the new plants in Chongqing. EBIT was up EUR 77.0 million to EUR 88.8 million. Due to the higher depreciation and amortisation EBIT increased to a lesser extent than EBITDA. The EBIT margin amounted to 11.6% (prior-year period: 1.9%). Mobile Devices & Substrates segment: strong revenue growth and significant increase in earnings Despite negative currency effects, revenue increased by 32.2% to EUR 580.0 million, which was primarily attributable to substantial contributions from the two plants in Chongqing, China. EBITDA rose by EUR 99.2 million to EUR 155.3 million based on general efficiency enhancement measures and higher contribution margins. Higher raw material prices and the persisting price pressure on IC substrates had a negative impact. The EBITDA margin, at 26.8%, significantly exceeded the comparative value of the previous year of 12.8%. Automotive, Industrial, Medical segment with stable revenue and a slight decline in earnings due to a one-off effect in the previous year In the Automotive, Industrial, Medical segment revenue increased by 3.4 % to EUR 270.8 million based on strong demand in all segments, but especially in the Industrial and Medical segments. EBITDA decreased by 12.6% to EUR 32.3 million, especially due to a one-off effect: the comparative figures of the previous year included the reversal of a provision for unused building space amounting to EUR 3.3 million; in addition, negative exchange rate effects and higher raw material prices had a negative impact on earnings. The EBITDA margin amounted to 11.9%, down 2.2 percentage points on the previous year. Outlook for the financial year 2017/18 The Management Board expects the usual seasonality for the fourth quarter of the financial year 2017/18. For the full financial year, AT&S expects revenue growth of 20-25% provided that the market environment and the exchange rate development remain stable. Due to the positive development in the first nine months, the management expects the EBITDA margin to slightly exceed the in October 2017 given forecast of 19-22%, and additional appreciation and amortisation of roughly EUR 15 million.